Just a few big landlords come up, again and again, in analysis of Ontario rent hikes

Newly released data from Ontario’s rental housing tribunal analyzed by CBC News shows that fewer than two dozen corporate landlords filed most of the applications to raise rents above provincial guidelines for most of 2022 — which one Toronto housing lawyer says is a sign of the increasing concentration in the province’s rental market.

CBC News found that 20 landlords filed over half of the 470 applications in the first eight months of 2022, with the top five filing over a quarter.

Starlight Investments, one of Canada’s largest landlords, with 54,000 residential units across the country, filed 46 applications, or nearly 10 per cent, which according to CBC’s analysis could affect over 6,000 units.

Properties owned or managed by Realstar Corp., the British Columbia Investment Management Corporation (BCIMC), Homestead Land Holdings and Hazelview Properties accounted for an additional 76.

The findings “reflect the fact that rental housing is being concentrated … in the hands of financial investors who have this stated and admitted purpose of generating a profit,” said Philippa Geddie, supervising lawyer of the housing division at Downtown Legal Services, a Toronto legal clinic.

She says Applications for Rent Increases above the Guideline (AGIs), are a common way to pressure longtime tenants to leave, allowing landlords to raise the rent to market rates for new tenants.

Landlords can “capitalize on situations where a building has been left derelict for a period of time or where necessary maintenance hasn’t been done,” which can be used to justify an AGI, she said.

Rental prices have risen sharply amid Ontario’s housing crisis. The average asking rent for a one-bedroom apartment in the province was $2,199 in March, according to Rentals.ca.

The data enumerates each AGI filed to the Ontario Landlord and Tenant Board (LTB) between January and August 2022. It was obtained through an access to information request, initially submitted and shared by the Association of Community Organizations for Reform Now (ACORN), a community union of low- and moderate-income people.

Ontario’s rent increase guideline for 2024 is 2.5 per cent. In most cases landlords can file to increase rent by up to an additional 3 percentage points a year under one of three conditions:

• For major capital expenditures, such as renovations of balconies or an elevator.
• When security service costs increase or are incurred for the first time. 
• To offset an “extraordinary” increase of municipal taxes on a property.

AGIs affect rent-controlled units built before Nov. 15, 2018. Newer buildings are exempt.

In statements to CBC News, the companies in question emphasized their commitments to their tenants, saying that they only file AGIs for essential capital projects like balcony and building repairs.

But Geddie says that even a rent increase of $30 or $60 a month can be the difference of being able to afford groceries or medication for people on fixed incomes via programs like Ontario Works or the Ontario Disability Support Program, who receive up to $733 and $1,308 a month, respectively.

“It is impossible for someone on fixed income to give up that amount per year without having to make sacrifices that affect them in a direct and physical way,” she said.

Landlords should pay, say tenants

For Michael Cuadra, 31, who has lived with his parents in a Starlight-owned building since he was eight, the additional $27 a month the Toronto family would have to pay if a pending AGI is approved impacts what other essentials they can afford.

“I’m still looking for work, so I’m on welfare. My parents are semi-retired,” said Cuadra.

“With food prices also going up … that is just more ways that our budget is getting squeezed out of us,” he said.

“We already cut cable and phone lines with Rogers because we needed to save money for my dad’s treatments.”

That AGI is for 1.54 per cent. Their rent could go up even more if a second one, for 5.27 per cent, is approved by the LTB.

In a statement to CBC News, a Starlight spokesperson said the company “made investments to ensure the aging infrastructure could continue to be a safe and welcoming place for more than 423 residents to call home.”

Cuadra argues that because landlords generate revenue from rent, it’s their responsibility to pay for renovations and repairs.

“If I owned a restaurant, I would not directly charge my customers for me to fix a broken oven,” he said.

Some advocates are calling for AGIs to be banned altogether.

“I don’t think [landlords are] using it in good faith, not in the numbers we’ve seen,” said Norma-Jean Quibell, co-chair of the West Nepean ACORN chapter in Ottawa.

Because of an AGI, Quibell is experiencing a 5.5 per cent increase to her rent this year, but says she and her neighbours are still in need of critical repairs to their windows and floors.

“This cuts into our budget quite a bit,” she said. “It makes it more difficult for families like mine to survive in this city.”

In a report on AGIs published Wednesday, ACORN Canada argues that costs related to substantive renovations stemming from a chronic lack of repairs should be ineligible.

‘Sustainability, maintenance, safety’

CBC requested interviews with each of the five companies, and received written statements from four.

Starlight, Realstar and Hazelview said they only file AGIs for allowable expenses under Ontario’s Residential Tenancies Act.

“Sustainability, maintenance, safety, and overall quality and reliability” are “very important” to Hazelview, said Colleen Krempulec, the company’s head of sustainability and brand.

Rental properties owned by BCIMC, an asset manager of many public servant pensions in B.C., referred questions to its subsidiary, QuadReal Property Group, which independently manages its rental properties.

A spokesperson for QuadReal and Parkbridge Lifestyle Communities, which filed AGIs for 18 of the 22 properties owned by BCIMC, said Parkbridge operates under a land lease model where residents own their houses but rent the land.

The spokesperson said that, with an average land rent of $616 a month, most of the company’s AGIs amounted to less than one per cent increase, or under $5 a month.

Homestead acknowledged CBC’s request but did not respond.

Realstar and Hazelview also referred questions to the Federation of Rental-housing Providers of Ontario (FRPO), whose members collectively own and manage about 350,000 rental homes across the province.

FRPO president and CEO Tony Irwin says AGIs are a way for landlords to maintain the province’s aging rental stock.

“When you look at what types of repairs, what types of work is done through the AGI process, these are major capital projects, significant dollars involved to do this,” he said.

Approximately 85 per cent of Ontario’s apartments were built before 1980, according to the Canada Mortgage and Housing Corporation.

Irwin acknowledged that “housing affordability is a big challenge for many Canadians” and said many of FRPO’s members offer relief programs for residents.

Starlight, for example, lets any resident apply for rent relief. A company spokesperson says 98 per cent of applicants receive compensation.

But Philip Zigman, the founder of RenovictionsTO, a volunteer-run project that tracks renter issues including AGIs in Toronto, says corporate landlords explicitly use them to maximize profits, often in terms such as “repositioning properties” or a “value-add strategy.”

“What’s notable about larger landlords driving the increase in AGIs is not that they have larger portfolios, but that they’re using above guideline rent increases as a strategy to maximize profits,” said Zigman.

88% of AGIs granted

Although tenants can dispute an AGI at the LTB, the vast majority pass. Reviewing 2,253 completed AGIs released by the LTB — both provincially since 2017 and in the Toronto area since 2010 — CBC News found that 1,978, or 88 per cent, were granted.

Zigman, who also co-authored a recent report on AGIs in the Toronto area and also reviewed CBC’s data analysis, says the LTB often just “rubber stamps” AGIs. He says tenants must work together if they want to see change, citing an ongoing rent strike in Toronto and a successful one in 2017.

“If you and your neighbours are concerned about [an AGI], then get organized and try to fight it outside of the LTB process,” he said.

In a statement, a spokesperson for Tribunals Ontario said “only a portion of the above guideline rent increase sought in an application may be granted by the LTB,” and that some cases that are considered approved are resolved by agreements between the landlord and tenant.

LTB decisions can be appealed within 30 days.

The number of AGIs has also steadily increased throughout the years. In 2003-04 year, the LTB received 292 such applications. By 2022-23, this number had more than doubled to 605.

Zigman says extensive renovations should be landlords’ responsibility since they receive the long-term benefits of increased value on their properties, even when tenants move out.

“The [large landlords] that we have publicly available information for shows that on any given year they’re paying out 20 to 30 per cent of their rental revenues to investors. So these are companies that could afford to pay to maintain and upgrade their buildings.”

 

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